Seeking permission to pollute

A monitor at George Washington High School on the Southeast Side shows that air in the neighborhood has the distinction of containing the state's highest levels of toxic heavy metals, chromium and cadmium, as well as sulfates, which can trigger asthma attacks and increase the risk of heart disease.

The school sits across from a long-shuttered industrial site where Leucadia National Corp. plans to build a $3 billion coal-to-gas plant that would add even more pollution to one of the nation's most polluted areas.

Two hurdles remain for the plant to become reality. Gov. Pat Quinn only needs to sign a bill that muscled its way through the General Assembly during the recent lame-duck session. And the state Pollution Control Board must decide whether the owners of the industrial site can sell their permission to pollute to New York-based Leucadia.

With pollution in Cook County above the limits allowed by federal law, the U.S. Environmental Protection Agency in 2005 issued an edict: Before more pollution can be added to the air here, a new polluter must first prove that an existing polluter has reduced its emissions.

To fulfill that criteria, Leucadia wants to persuade the state to let it purchase the permission to pollute from the owners of the industrial site, a coke facility that has been idle for about a decade. The Illinois Environmental Protection Agency has opposed the sale of the pollution offsets, saying the coke plant's pollution was never factored into Cook County's toxic air because it stopped operating years before the edict was issued.

Supporters of the Leucadia plant say the idea behind making synthetic gas is to turn something dirty that Illinois has in abundance (coal and petroleum coke from refinery waste) into something cleaner (synthetic natural gas) and to create jobs and stimulate the economy.

"The clean energy plant will serve as a major economic engine for Chicago's Southeast Side," State Sen. Donne Trotter, D-Chicago, said after the Leucadia bill passed. "It will create over a thousand job opportunities during construction and provide hundreds of full-time jobs for Chicago residents. This is a step in the right direction to ensure that Illinois takes the lead in clean coal technology. The major benefits outweigh any possible costs for this project."

Opponents, though, contend that the negatives far outweigh the positives.

Consumer advocates note that under two bills passed in the previous session, Illinois utilities would be required to purchase synthetic gas from the Leucadia plant for 30 years and from a plant downstate for 10 years and that the gas will be more expensive than natural gas and help drive up heating bills for northern Illinois customers as much as $191 a year.

"Turning coal into natural gas is a dirtier, more expensive way to heat our homes," said Jack Darin, director of the Sierra Club Illinois Chapter. "Illinois residents should not have to pay higher gas bills to subsidize these risky projects — they're unnecessary and will add millions of tons of air pollution. Illinois should be cutting gas bills and pollution by helping us save energy, not putting us all on the hook to subsidize out-of-state companies."

The gas plant site, 11400 South Burley Ave., is where LTV Corp. once manufactured coke used in making steel. The facility closed in December 2001 when LTV filed for bankruptcy. Cousins Alan, Steve and Simon Beemsterboer, who acquired the site in bankruptcy court, made plans in 2004 to restart the coke plant near Lake Calumet. But those plans never materialized.

Now the Beemsterboers, through an entity called Chicago Coke LLC, are fighting the Illinois Pollution Control Board to allow it to sell its permission to pollute, along with the property, to Leucadia.

The move follows years of meetings and letters, outlined in legal documents, between Chicago Coke and the Illinois EPA, which repeatedly denied the company's request to sell its permission to pollute, saying that the intent behind emission reductions is to clean up existing pollution, not to give previous polluters a commodity to sell on the open market.

Chicago Coke filed simultaneous appeals to the Illinois Pollution Control Board and the Chancery Division of Cook County Circuit Court, arguing that the state EPA had given the go-ahead to pollute when it was planning to restart the coke plant and that it should have the right to sell that permission. The Circuit Court dismissed the case this month, leaving it up to the Pollution Control Board to decide. A hearing date has not been set.

For the Illinois coal industry, the proposed gas plants would provide a potential lifeline. In 1990, Illinois coal production fell by half as a result of environmental regulations that deemed that the high levels of sulfur found in Illinois coal emitted dangerous pollutants when burned.

So Illinois coal has been getting shipped overseas while lower-sulfur coal is hauled in from other states to fuel Illinois electric generating plants.

Supplying the Leucadia plant, as well as a synthetic natural gas plant proposed for Jefferson County southeast of St. Louis, "creates a market where one virtually doesn't exist today," said Phillip Gonet, president of the Illinois Coal Association.

Leucadia says its coal-to-gas plant would create about one-hundredth the pollution of traditional coal-fired power plants. That's because gasification plants don't burn coal, which send toxic byproducts into the air through a smokestack. Instead, the coal is gasified through a chemical process and byproducts are collected, traveling via a series of vessels and pipes, to be sold and reused.

"If this thing ran perfectly all the time, and we never had to stop it, there would essentially be no emissions," said Hoyt Hudson with the Leucadia project. "The times when the plant can potentially generate emissions is during stop and start times."

Many experts said the pollution would be similar in magnitude to an average factory or Northwestern Memorial Hospital.

Transferring pollution credits from the shuttered coke plant would clear Leucadia to annually emit 157 tons of soot, 56 tons of volatile smog-forming chemicals and 1,067 tons of nitrogen oxide, according to state records.

That suggests that the plant could end up emitting about as much lung-damaging nitrogen oxide as the Fisk Generating Station, an aging coal-fired generator in Chicago's Pilsen neighborhood. Owners of the Fisk plant are facing a federal lawsuit alleging that it emits too much air pollution.

Those numbers do not include pollution emitted from extracting and transporting coal and refinery waste to and from the site or from carbon dioxide emissions, 85 percent of which the company has said would be sequestered.

Hudson said Leucadia expects to need only one-tenth the pollution offsets that would be offered in a deal with Chicago Coke.

"I don't think there's anything you could add up that puts us anywhere near the order of a coal-fired power plant," Hudson said.

Rosa Perea, assistant director of Centro Comunitario Juan Diego, a small nonprofit in the heart of South Chicago, said asthma studies of Chicago show

asthma rates on the South Side that are nearly twice that of the North Side. Among those cases: her 5-year-old son, who has severe asthma.

"Every time I turn around, there's something else that they want to put down here that won't help the community," she said. They say jobs and all that, but what's going to happen in the long run? How much will it cost for insurance to keep our families healthy? I don't want it here."

The Natural Resources Defense Council has applied to intervene in the case.

"We feel very strongly that the Illinois EPA was right, and we are supporting that decision for a whole variety of reasons," said Ann Alexander, senior attorney with the Midwest program of the NRDC. "Chicago is being hammered with coal plants, like the Fisk and Crawford plants that really have no business continuing to operate. It's better than burning pulverized coal, but that doesn't make it a good idea or a good solution for Chicago."